TaxTMI 
TaxTMI 
2022 (10) TMI 983
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.... & 1691/Chny/2017 are appeals against the order passed by the ld. CIT(A) under section 248 of the Act. Since, the facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed of by this consolidated order. 2. The assessee has, more or less, raised common grounds of appeal and therefore, for the sake of brevity, the grounds of appeal filed in I.T.A. No. 1690/Chny/2017 are reproduced as under: 1) The orders of the Assessing Officer ('AO') and that of the Commissioner of Income Tax (Appeals) ['CIT (A)'] are against the law, the facts and circumstances of the case and the principles of equity and natural justice. 2) The CIT (A) erred in confirming the order of the AO and holding that the appellant is required deduct tax at source on the payments made to M/ s BASF SE CARL= BOSCH-STRASSE 38 LUDWIGSHAFEN ('BASF SE')under section 195 (2) of the Income Tax Act ('Act'). 3) The CIT (A) erred in holding that the payment made by the appellant to BASF SE is payment in the nature of fees for technical services, by merely relying on his earlier orders, which have not attained finality. 4) T....
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....ing Officer @ 10% on amount remitted to its parent company. However, the assessee has filed an appeal before the ld. CIT(A) under section 248 of the Act and to declare that the assessee is not liable to pay TDS on payment to non-resident. The ld. CIT(A), after considering relevant facts and also analysis of various provisions of the Act, including DTAA between India and Germany, rejected the appeal filed by the assessee and upheld the action of the Assessing Officer on levying 10% TDS payment. 4. Against the order of the ld. CIT(A), the assessee is in appeal before the Tribunal. 5. The ld. Counsel for the assessee, referring to the cost sharing agreement between the assessee and its parent company, submitted that the assessee company is one of the pool members of the BASF SE, Germany had entered into cost sharing agreement with its parent company for availing certain common services to be procured and provided by its parent company BASF SE, Germany on cost to cost basis without any mark-up. The ld. Counsel for the assessee has further submitted that its parent company has provided services on cost to cost basis without any mark-up or profit. Therefore, the assessee is not liable ....
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...., the Assessing Officer and the ld. CIT(A) has rightly held that the assessee is liable to pay TDS and therefore, ld. CIT(A)'s order has to be upheld. 8. We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. The assessee is a member of BASF group and had entered into Cost Sharing Agreement with effect from 1st January, 2010 with its parent company. As per the agreement between the assessee and its parent company, BASF SE, Germany procures and provides certain common services to pool members on cost sharing basis. The agreement further specifies the nature of services to be provided and the manner in which cost should be shared by pool members. The assessee claims that the payment made to its parent company, a non-resident entity is reimbursement of expenses without any mark-up and to this effect, the assessee has filed an audit report of Deloitte GmbH, where, they certified that the services provided by BASF SE, Germany in terms of cost sharing agreement with pool members is on cost to cost basis without any mark-up. The assessee, on the basis of cost sharing agreement and also in light auditor certificate claim....
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....of payment as fees for technical services the Assessing Officer has properly examined the cost sharing agreement, the nature of services provided and other relevant factors including the relevant provisions under the India Germany DTAA. While deciding the appeals of the assessee, the learned Commissioner (Appeals) has upheld the orders passed by the Assessing Officer for the following reasons:- i) Invoice dated 17.12.2012, raised by BASF SE on the assessee does not refer to cost sharing agreement dated 25.05.2000. ii) Services to be rendered under the cost sharing agreement are in the nature of fees for technical services. iii) Cost sharing agreement was executed in the year 2000, whereas, the assessee became party to the agreement in the year 2010. Thus, when the assessee prior to 2010 did not making any remittances for availing such services there is no need to do so now unless the assessee avails services in the nature of fees for technical services. 9. As regards the allegation of the learned Commissioner (Appeals) that the invoice raised by the BASF SE dated 17th December 2012, does not refer to the cost sharing agreement, we find such allegation to be factually inco....